Pulmonary surfactant, which is synthesized and secreted by alveolar type II cells, reduces surface tension at the air-liquid interface. The critical importance of pulmonary surfactant to normal lung function is underscored by the fact that a deficiency in pulmonary surfactant has been incontrovertibly linked to respiratory distress syndrome (RDS) in neonates. Synthesis and storage of pulmonary surfactant increase dramatically at the end of gestation. The molecular regulation of type II cell maturation, however, is not yet completely understood. Our preliminary data demonstrate that hypoxia inducible factor-la (HIF-1() plays an important role in lung epithelial differentiation. Cre-mediated deletion of HIF-1( in lung epithelial cells results in neonatal death from respiratory failure. Lungs from affected animals show significant reductions in several key components of the surfactant system. The present proposal will test the hypothesis that the hypoxic environment in utero is critical for increased surfactant production at the end of gestation, and that HIF-1( regulates key aspects of this process. We will examine the mechanism(s) by which HIF-1( influences lung epithelial cell differentiation in three specific aims. In the first specific aim we will use a transgenic model to determine how lung-specific HIF-1( deletion regulates overall surfactant phospholipid biosynthesis. Our preliminary data also indicate that expression of surfactant protein B (SP-B) and the lipid transporter ABCA3 are decreased in the epithelium of mice in which HIF-1( has been deleted. In the second specific aim we will use mice with lung-specific HIF-1( deletion to determine the role of HIF-1( in the regulation of SP-B and ABCA3. We will test the ability of HIF-1( to directly activate SP-B and ABCA3 transcription in vitro and define its interactions with hypoxia response elements. We will use a transgenic mouse model in which a constitutively active form of HIF-1( is inducibly expressed in the lung epithelium to determine if the effects of HIF-1( on SP-B and ABCA3 expression are direct. In third specific aim, we will express an inducible, dominant-negative form of HIF-1( in the lung epithelium to determine if HIF-1( is critical during particular periods of lung development. We will also use this model to determine if conditionally expressed SP-B or ABCA3 can reverse the HIF-l(-deleted phenotype. By defining the role of HIF-1(, these studies will provide important new information about the regulation of distal lung epithelial differentiation.